Rent a room relief – call for evidence

Following on from the comment by the chancellor that he wanted to “align the relief more closely with its intended purpose, to increase supply of affordable long-term lodgings” a call for evidencehas been published to find out how rent a room relief is utilised by individuals.

The relief allows up to £7,500 to be received tax free by an individual for letting out furnished accommodation within their own homes. The government say the original intention was “to increase the quantity and variety of low-cost rented housing, giving more choice to tenants and making it easier for people to move around the country for work”. However, it is available whether the room is rented out on a nightly basis to 365 different individuals or to one individual for 365 nights. It can be claimed by guest houses and by people providing bed and breakfast whether that is for leisure or work and not just ordinary householders.

An individual not in self-assessment has no responsibility to report their income covered by rent a room relief, those in self-assessment should report that they are taking advantage of the relief, and as a consequence HMRC do not know how widespread claims for relief are, hence the call for evidence.

If you would like to contribute evidence for the use of rent a room relief please add comments below or email sue.moore@icaew.com. Responses have to be submitted to HMRC by 23 February 2018.